Presidential campaigns often use the backdrop of small businesses — record stores, diners, machine shops — to emphasize their candidates’ authenticity and hometown values. But this election cycle has taken those businesses a bit more seriously.
In speeches and ads, Vice President Kamala Harris has sought to infuse entrepreneurship into her brand — an avowed capitalist, but for the little guy. Her economic policy platform mentions “small business” 77 times, including a section aimed at addressing owners’ needs, such as easing licensing requirements and funneling more federal contracts their way.
It’s not hard to see why a candidate might lean in on Main Street: Small businesses are collectively the most respected institution in American life, according to research from Gallup and Pew. Ms. Harris’s messaging might also help counter former President Donald J. Trump’s reputation as a successful business owner, which continues to bolster his economic credentials among voters despite his many bankruptcies and sometimes fraudulent practices.
Ms. Harris’s focus on small business isn’t completely new. She also took on the issue as vice president, visiting businesses to hand out billions of dollars in loans funded by the American Rescue Plan Act. She often talks about her “second mother,” Regina Shelton — who ran a nursery school in Berkeley, Calif. — as a small-business owner and an integral part of the community.
“Kamala’s economic plans are designed to help people like Mrs. Shelton, so that they have enough in the bank to start a business or pass something on to their kids,” said Felicia Wong, who runs Roosevelt Forward, a progressive advocacy group.
But small businesses are a tough crowd for any Democrat.
Although polling on small businesses is imperfect, surveys consistently show that their proprietors skew Republican and Independent. This cycle, a survey by UBS found that 53 percent of business owners were planning to vote for Mr. Trump, and one by CNBC found that 50 percent thought his policies would be good for their businesses, compared with 32 percent for Ms. Harris.
Many of them remember the Trump administration fondly. The Republican-backed tax overhaul in 2017 slashed taxes both for corporations and for pass-through businesses — operations whose income is taxed at the owner’s individual rate — and Mr. Trump’s agencies rolled back or withdrew many labor, financial and environmental rules. The long-running optimism index from the National Federation of Independent Business jumped sharply after Mr. Trump was elected and has languished over the past two years.
“When he was in office, it was nothing to do with him,” said Steve Martinez, a luxury-home builder in Boise, Idaho, who said he was leaning toward a Trump vote. “It was the people he had surrounded himself with, I felt like were very business-friendly. And that meant solution-based concerns and thoughts being brought up.”
The support comes despite projections that Mr. Trump’s plans, especially sweeping import duties and immigrant deportations, would lead to higher inflation and lower growth.
William Carroll, head of sales and development for the wealth management division of UBS, helped oversee his company’s poll of business owners and talks to many of them frequently. Although his clients aren’t typically enthusiastic about those ideas, they also tend not to take Mr. Trump’s prospects for executing them very seriously.
“They feel like whatever both candidates are saying from an extreme perspective will probably never come to reality,” Mr. Carroll said. “For example, is Trump really going to have 200 percent tariffs? Probably not.”
The Biden years have been a mixed bag for small businesses. Federal loans and grants saved many of them during the pandemic, while rules expanding overtime protections and restricting the use of independent contractors made staffing more expensive. Inflation and then high interest rates created crushing pressure, but the small-business mood has lifted as both of those forces have eased. The period also saw a wave of start-up activity after decades of malaise as millions quit their jobs, many to follow passion projects.
Ms. Harris’s small-business package seeks to capitalize on that momentum, setting a goal of 25 million new-business applications in four years. She also proposes to multiply the start-up expense deduction tenfold, to $50,000, and to create a fund for zero-interest loans to help businesses expand.
That’s the kind of thing that appeals to Abi Gilman, a first-time founder and a mother of three children under 6. She started Little Village Play Cafe, a hybrid space for parents to hang out while their children socialize under supervision, in Wauwatosa, Wis., in 2022. At first she relied on high-interest bank loans to build out the space and bring on employees. She thinks Ms. Harris’s ideas would have helped, along with other proposals that generally help stabilize families so they can create their own enterprises.
“If you don’t have a ton of access to capital or resources — in terms of child care, health insurance — those things would prohibit you from starting a business, and what a shame that is,” Ms. Gilman said. “We are hardly making it work.”
Ms. Gilman supports the Democratic ticket, but she notes that taxes are a significant burden. And that’s a sticking point for many of her entrepreneurial colleagues.
The 2017 tax law created a 20 percent deduction for businesses structured as pass-throughs, lowering taxes for some 23 million of them. Like the other individual tax provisions, it expires in 2025, and several small-business advocacy groups are lobbying for it to be extended. But the benefits are heavily skewed toward larger companies, and progressive groups want the law to lapse.
Ms. Harris’s campaign declined to say whether she would support renewing the pass-through deduction. But she has proposed a new standard deduction for small businesses, similar to the one that individual filers can use. The idea had been championed by some organizations, such as Small Business Majority, which has conducted polls suggesting that about half of small businesses also support raising the corporate tax rate and the capital gains tax.
The Trump campaign has not put out a plan specifically addressing small businesses, but it did attack Ms. Harris’s proposals, saying that the expanded start-up expense deduction — a more modest version of which Republicans proposed in 2018 — wouldn’t make up for allowing the rest of the 2017 tax cuts to lapse.
While plenty of small businesses are drawn to Mr. Trump’s general promises to reduce taxes and ease regulations, many others find merit in other pieces of the Democratic platform that benefit particular sectors.
For example, small booksellers and independent grocers have supported the Biden administration’s antitrust agenda, which has involved constraining large tech companies and more carefully scrutinizing mergers. And preschools are attracted by Ms. Harris’s focus on helping parents afford child care, particularly through direct subsidies to businesses providing it.
Bill Berk is the chief executive of Small Miracles, a chain of preschools throughout Arizona. The company is owned by a private equity firm — an increasingly common arrangement as the economics of running a small child care center worsen — and Mr. Berk often hears from independent owners who have been losing money since funding from the American Rescue Plan Act ran out last fall. Ms. Harris has promised to cap child care expenses at 7 percent of families’ incomes, which could help more of them afford professional care rather than leaning on friends and family members.
“I think the Democrats are right on track,” said Mr. Berk, noting that gestures toward supporting child care on the Republican side had not turned into action. “It’s great to hear it spoken about in a bipartisan way, but we haven’t seen votes in a bipartisan way yet.”
And then there is health care, which can be a crushing expense for small employers. The Affordable Care Act created premium subsidies that enabled businesses with fewer than 25 employees to offer coverage. Ms. Harris has pledged to expand those subsidies and make them permanent, while Mr. Trump has offered no concrete plan.
Walter Rowen runs Susquehanna Glass Company, a glassware decorator in Columbia, Pa. The company has been through many ups and downs over its 114 years in operation, weathering trade shocks, the decline of catalog-based retailing and now the thicket of e-commerce.
Mr. Rowen brushes off the idea of tariffs as a way to aid small manufacturers. “You can’t fantasize about how wonderful it was back then and think you can go back,” he said. “It’s just not realistic.”
But the availability of insurance through the 2010 health care law, Mr. Rowen said, has been “unbelievable, just hugely significant.” When the company made cutbacks in the early Covid years and sank below 50 employees, he was no longer required to offer an insurance plan, and doing so had become prohibitively expensive. Instead, the company helped its workers to buy individual coverage on the Affordable Care Act exchanges.
“They got better policies, and everyone is better off,” Mr. Rowen said. “Something like eliminating the A.C.A. is a huge difference between the Democrats and the Republicans.”
Democrats are hoping that this larger basket of policies that matter to small businesses — including affordable housing and paid family leave — will punch through the Republicans’ more narrow focus on cutting taxes and regulations.
Richard Trent is the executive director of the progressive-leaning Main Street Alliance, a nonprofit representing small businesses. Despite his support for Ms. Harris’s priorities, he feels her party has to strike a tricky balance when it simultaneously vows to rein in big corporations.
“I do believe that too often Democrats underestimate the extent to which the small business of today wants to be the large business of tomorrow,” Mr. Trent said. “Not registering that ambition can lead to Democrats espousing policies that the up-and-coming entrepreneur is pretty clear they don’t want.”
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